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The Economic Preferences of Cooperative Managers

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  • Alves, Guillermo

    () (Development Bank of Latin America)

  • Blanchard, Pablo

    () (IECON, Universidad de la República)

  • Burdin, Gabriel

    () (Leeds University Business School)

  • Chávez, Mariana

    () (IECON, Universidad de la República)

  • Dean, Andres

    () (IECON, Universidad de la República)

Abstract

A growing body of research has been investigating the role of management practices and managerial behaviour in conventional private firms and public sector organizations. However, little is known about managers' behavioural profile in noninvestor-owned firms. This paper aims to fill this gap by providing a comprehensive behavioural characterization of managers employed in cooperatives.We gathered incentive-compatible measures of risk preferences, time preferences, reciprocity, altruism, and trust from 196 Uruguayan managers (half of them employed in worker cooperatives) and 92 first-year undergraduate students. To do this, we conducted a high-stakes lab-in-the-field experiment in which participants played a series of online experimental games and made incentivised decisions. The average payoff in the experiment was approximately 2.5 times higher than the average local managerial wage in the private sector. Our key findings are that (1) the fraction of risk loving subjects is lower among co-op managers compared to conventional managers, and (2) co-op managers appear to be more altruistic than their conventional counterparts. Interestingly, we do not observe significant differences between the two groups across other preference domains, such as impatience, trust, and reciprocity.

Suggested Citation

  • Alves, Guillermo & Blanchard, Pablo & Burdin, Gabriel & Chávez, Mariana & Dean, Andres, 2019. "The Economic Preferences of Cooperative Managers," IZA Discussion Papers 12330, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp12330
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    Keywords

    risk-aversion; time preferences; altruism; reciprocity; trust; lab-in-the-field experiment; managers; cooperatives;

    JEL classification:

    • C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • J54 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Producer Cooperatives; Labor Managed Firms

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